Delhi's trader is a worried man

Sealing orders, bulldozers, discrepancies in VAT, influx of Chinese goods and arrival of the corporate retailer — life sure is tough for the Delhi trader. No wonder he feels it’s not attractive to be a trader anymore. This, when the Capital has the distinction of being a trading hub since mediaeval times. But now, it’s slowly losing its place in the sun.

The commercial sealing drive that began last year has slowed down business activity in Delhi. Nearly 80 lakh people have been affected so far. Industry estimates suggest that retail business is down by 50% in the NCR region.

Feeling the seal: ‘‘A whole local economy thrives around a single shop. This includes the chai and dhabhawala, courier services, STD booths and cartmen. Many are directly dependent on such shops for their monthly income. The livelihood of this segment has also been affected by sealing,’’ asserts Praveen Khandelwal, secretary general, Confederation of All India Traders.

For Satinder Wadhwa, owner of a watch showroom in GK-1, the sealing of his shop last November was difficult to digest. ‘‘MCD authorities say I don’t have permission from the local RWA to operate my showroom. We have been selling watches here for over four years now. We have also paid all commercial taxes.’’

Paramjeet Singh Makkar of Bhatti Auto in Mayapuri is also a dejected man. ‘‘Around 127 shops in this stretch have been sealed in the last one year, including mine,’’ he says. He’s not sure how long his savings will last. It’s the same story with Wadhwa who plans to switch to a less capital intensive business if nothing else works out. ‘‘Our association has also petitioned the government for rehabilitation,’’ he says.

VAT’s up: The introduction of VAT (Value Added Tax) too has squeezed the margins of retailers, besides ofcourse increasing the prices of commodities. Rohit Bhariya running a plywood business says plywood itself attracts four different types of VAT. ‘‘There is a 12.5% tax on laminate and moulding, and a 2% one on board and ply. We were told that with the introduction of VAT, there would be uniformity and other taxes would be abolished. But there’s not much clarity in the present system,’’ he says.

In fact, many businessmen have shifted operations to neighbouring states (Haryana, UP and Punjab). ‘‘Those in the plywood, auto spare parts and builder hardware business have been hit hardest. When introducing VAT, authorities said it would replace the existing system of inspection and the tax structure would become simpler. Not only has the tax structure become complicated, but the VAT Act also consolidates Inspector Raj,’’ says Khandelwal.

Also, the influx of cheaper goods from China in recent years has dented the business margins of many traders. ‘‘Chinese weighing machines are 30-40% cheaper than Indian ones,’’ says Satender Jain of Roshan Lal Jain and Company in Chawri Bazaar. Jain sells weighing machines. He says consumers are naturally tempted to buy cheaper goods, giving locally-produced stuff a big beating.

Retail bugbear: But the biggest worry for small traders is the arrival of corporate and international retailers. After all, the last mile access from factory to home is provided by the neighbourhood kirana store. Their income is largely derived from bulk purchases and margins on MRP (maximum retail price). But chains such as Subhiksha and Reliance Fresh are offering goods below MRP (by sourcing them directly from the manufacturer).

Moreover, these chains have super saver schemes which traders can’t offer. Rising prices means consumers will flock to such retailers for their monthly purchases. ‘‘Already many big retailers have latched on to ideas popularised by the nearby kirana store like free home delivery,’’ states Bhariya.

‘‘Many fruit and vegetable vendors and radiwallas are already feeling the heat from these big retailers. If this situation persists, it’ll lead to unemployment on a large scale,’’ warns Prem Arora, president, Delhi Kirana Committee.

Class apart: Economic woes apart, some traders have also experienced class discrimination. ‘‘Schools, especially international schools, admit kids of working parents in KG. They’re not keen on enrolling the child of a local trader and his housewife,’’ says Prem Nath, a fruit merchant in Pitampura.

Many salaried classes feel traders themselves are responsible for their plight. ‘‘Many of my classmates who belonged to trading families always had this air of defiance about them. This only intensified over the years as they thought money power could buy anything. Unauthorised commercial construction was also the result of such attitude,’’ says Nitin Shukla, an IT professional in Gurgaon.

Take the case of Shyam Sunder Gupta, a chemical engineer by profession. He went into the family business of chemicals soon after completion of studies. ‘‘At that time, the environment was conducive for business and I thought my degree would help me in business.’’

But over the years, his company’s turnover came down due to the closure of numerous textile mills and flooding of imported textiles in the market. ‘‘Sometimes, I feel I should have joined the corporate world or gone abroad for further studies,’’ he says wistfully.

These are tough days for the local trader. Most are adopting a wait-and-watch policy. They are hoping that some kind of solution might be worked out as the government can’t wash its hands off the issue. ‘‘If worse comes to worst, I will have to pack my belongings and head back to my village in Rajasthan which I left some 25 years back,’’ remarks Bhariya.

Also, Gen Next of these trading families is likely to opt out of it. Wadhwa says he is already telling his teenage son to study hard and do something on his own. ‘‘My business is shut for the moment.’’ That’s the reality of life.